For a Del Taco franchise in North Dakota, where must arbitration or mediation take place?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 17(u) of the Disclosure Document, Section 17.3 of the Franchise Agreement, and Section 18 of the Development Agreement requiring resolution of disputes to be outside North Dakota may not be enforceable under Section 51-19-09 of the North Dakota Franchise Investment Law and are hereby amended to the extent required by law. The site of arbitration or mediation must be in in North Dakota or a location agreeable to all parties.
Item 17(v) of the Disclosure Document, Section 17.2 of the Franchise Agreement, and Section 20 of the Development Agreement requiring franchisee/developer to consent to resolution of disputes to be outside North Dakota may not be enforceable under Section 51-19-09 of the North Dakota Franchise Investment Law and such requirement is hereby deleted to the extent required by law. Any litigation under the agreement shall be conducted in North Dakota or a mutually agreed upon location. The provisions of this paragraph are subject to the United States Arbitration Act (9 U.S.C. § 1 et seq.).
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Item 17(u) of the Disclosure Document, Section 17.3 of the Franchise Agreement, and Section 18 of the Development Agreement, which initially require dispute resolution outside of North Dakota, are amended for franchisees in North Dakota. These sections may not be enforceable under Section 51-19-09 of the North Dakota Franchise Investment Law. Therefore, the site of arbitration or mediation for a Del Taco franchise in North Dakota must be in North Dakota or a location agreeable to all parties involved.
This amendment ensures that Del Taco franchisees in North Dakota are not forced to resolve disputes in a distant or inconvenient location, protecting their rights under North Dakota law. This is a significant benefit for prospective franchisees in North Dakota, as it provides a more accessible and potentially less costly means of resolving any conflicts that may arise during the franchise term.
Furthermore, Item 17(v) of the Disclosure Document, Section 17.2 of the Franchise Agreement, and Section 20 of the Development Agreement, which require franchisees/developers to consent to resolution of disputes outside North Dakota, are also amended. Any litigation under the agreement shall be conducted in North Dakota or a mutually agreed upon location. This provision is subject to the United States Arbitration Act.
These amendments reflect North Dakota's commitment to protecting its franchisees and ensuring fair business practices within the state. Prospective Del Taco franchisees in North Dakota should carefully review these amendments and understand their rights under North Dakota law.